Stocks to open flat on ruble depreciation, lower foreign bourses

MOSCOW, Jul 6 (PRIME) -- The Russian stock market is likely to open little changed because the ruble’s deprecation should support the shares and outweigh the impact of falling foreign markets, analysts said on Thursday.

“The global markets’ mood could be described as negative on Thursday morning. The leading Asian bourses lost up to 1.7% … and the futures for the key U.S. indices lost 0.3% today after a moderate fall yesterday. The closest futures contract for the Brent oil contracted by 0.5% after the Wednesday growth,” Bogdan Zvarich, senior analyst at financial platform Banki.ru, said.

But the Russian market should hold its positions near Wednesday’s closing during Thursday’s opening, because further improvements on the energy market, where the oil price is trying to entrench in the U.S. $75–80 range, is favorable for the national stock market, Zvarich said.

“The MOEX Russia Index fell by 0.11% to 2,805.00, while the RTS Index lost 1.83% to 969.33 (on Wednesday). The ruble is losing positions on all fronts, and the MOEX Russia Index will not fall any deeper and will try to climb to 2,870,” BitRiver financial analyst Vladislav Antonov said.

Central Bank First Deputy Chairman Ksenia Yudayeva said that imbalance in Russia’s external trade caused the ruble depreciation because the falling prices for commodities undermined the export revenue while imports are rising in line with economic recovery. If the external background remains negative and if no obstacles for the buyers emerge, the ruble will continue falling, and even some growth of the oil prices would be of no help given the trade imbalance, Vladislav Antonov said.

But Alexei Antonov, head of Alor Broker’s investment consulting department, said that the ruble’s fall ceased to be a strong driver for the market, and the MOEX Russia Index is not making any attempts to hit new annual records even though the shares of some metals and oil companies are growing thanks to the ruble’s fall. The tendency of the index staying flat should continue on Thursday, he said.

End